Zephyr Peacock leads ₹55 crore funding round in Shiksha Finance

Private equity fund Zephyr Peacock India Growth Fund has led a ₹55 crore funding round in Shiksha Finance, a Chennai-based education finance company, said a senior executive. The deal was advised by Intellecap’s Investment Banking Group. .
The round also saw participation from existing investors of the company. Shiksha finances students in classes I-X and also provides financing for working capital and capital expenditure to schools that run classes from nursery/kindergarten to Class 12.
“₹55 crore of growth capital has been raised from new investor Zephyr Peacock India Growth Fund and existing investors Aspada Investment Company and Michael and Susan Dell Foundation,” said Shiksha chief executive officer and director V.L. Ramakrishnan. Shiksha will use the funds to expand its presence in existing locations and foray into new locations such as Maharashtra. It is currently present in Tamil Nadu, Andhra Pradesh, Telangana and Karnataka.
Prior to the current round, Shiksha raised a ₹21 crore Series A round from Aspada and the Michael and Susan Dell Foundation in 2017. It has also raised an additional ₹115 crore of debt so far. “Shiksha is uniquely placed in the education financing ecosystem as a lender to both schools and students. Its product offerings help improve the quality of affordable private schools and help children from low-income backgrounds access quality education,” said Pankaj Raina, managing director, Zephyr Peacock India.
Access to quality education is an aspiration for most lower and lower middle income households in India and Zephyr Peacock India believes this is a multibillion dollar market, he said. “Zephyr Peacock has been closely tracking the education finance space. Our investment in Shiksha fits well with Zephyr’s investment thesis in the education financing sector,” Raina said.
Shiksha provides student loans to parents of school-going children, and school loans to educational institutions. The average student loan is for ₹25,000 for 12 months, while the average school loan is of ₹7 lakh for a tenure of four years, said Ramakrishnan. It has a loan book of ₹102 crore, which it aims to double over the next 5-6 quarters.

PPPs Will Strengthen India’s Healthcare System

Tanya Philip, Associate with the Advisory Team, Intellecap, talks about leveraging strengths of the private sector to infuse greater efficiencies and resources that will help strengthen India’s public health

According to a study published by The Lancet, India’s performance in the global healthcare access and quality (HAQ) index was lower than our neighbours Bangladesh and Sri Lanka as well as all other BRICS nations. Poor quality of services in the public sector and a heavily commercialised private sector have together resulted in poor access to affordable and good quality healthcare for a majority of the Indian population.

One of the central issues plaguing the sector has been the abysmally low public spending on health. The National Health Policy 2017 aims to “increase government health expenditure as a percentage of GDP from the existing 1.15 per cent to 2.5 per cent by 2025.” This is unimpressive when the current global average stands at about 6 per cent, according to The Lancet. Furthermore, the World Health Organisation noted that it is difficult to get close to Universal Health Coverage at less than 4 per cent -5 per cent.

This leaves much to be desired from non-governmental stakeholders in order to help bridge this immense national resource gap. Niti Aayog’s proposal to rope in private sector providers for the treatment of non-communicable diseases demonstrates the government’s willingness to augment its healthcare response capacities by bringing private players on board. Additionally, the central government’s most recent Ayushman Bharat health insurance scheme seeks implementation support from the private sector by means of expanding their scope of operations. Overall, aside from the capital constraints, the sheer size of the national healthcare challenge at hand demands for a more collaborative approach.

Much of the conversations around healthcare reform recently have been constrained by ideological debates on public versus private. The ground reality is that about 70 per cent of healthcare service delivery in India today is driven by the private sector. Leveraging the strengths of the private sector can only infuse greater efficiencies and resources that will help to strengthen our national response to our healthcare challenges.

That being said, any collaborative healthcare delivery model should be based on clear terms and conditions, defined partner obligations and performance indicators monitored over a stipulated period of time in order to achieve common, pre-determined healthcare objectives. In addition, consideration needs to be given to technology changes that are likely to impact how healthcare is delivered.

The 108 Emergency Management and Research Institute (EMRI) is a unique public private partnership model between state governments in India and private players which employs an ‘operate and maintain’ service contract between the two. This initiative undoubtedly fills an existing needs gap with coverage estimated to be 750 million people at an annual per capital cost of less than $ 0.25. However, insufficient supervision and a lack of due diligence has caused some concerns recently. Audit reports noted that the MoUs were signed in a manner that undermined the ability of the state to enforce conditions of service and levy penalties for deficiencies. Competition is crucial for the success of the contracting and bidding process since it helps keep costs down and maintain high services quality. Unfortunately, there is not much competition in the emergency medical services suppliers market in India. More competition could be infused through shorter contract periods. Performance needs to be more closely linked to payments. Outcome indicators around quality of service, response time and utilisation rates need to be closely monitored and certain service delivery standards should be set as pre-requisits for contract reapplication.

Thus, the design and management of service contracts under PPPs in healthcare can determine the extent to which they can succeed. The absence of well designed and implemented service contracts should not be read as a failure of PPPs altogether. The key ingredients for the success of a PPP include the transfer of risk from public to private, strictly monitored performance indicators and government ownership of assets at the end of the contract period.

This is, in no way, a means of absolving the government of its financial responsibility of increasing budgetary allocation for public provisioning of healthcare services. Without exploring more collaborative, innovative approaches to help nudge things along, India’s public health crises will only multiply over the years.

What most women-led enterprises in India have in common?

Mumbai, 3rd Dec: Urvashi Devidayal, Sankalp Lead India , Intellecap and Prachi Maheshwari, Gender Lead, Intellecap as part of our yearlong content partnership with Forbes India contribute the third story in the Forbes series.

As a quick recap the first story titled ‘Instant loans: Alternate data to drive next financial inclusion wave’ in this Forbes Series was authored by Atreya Rayaprolu, Co-Founder and CEO Tribe3. The second story titled ‘Smart villages: Driving development through entrepreneurship’ was authored by Santosh Kumar Singh, Director, Intellecap and Ankit Gupta, Manager, Intellecap.

Titled ‘What most women-led enterprises in India have in common’ the article by Urvashi and Prachi bears its genesis to a recent economic survey which has highlighted significant increase in women-led enterprises in India.

The author’s opine that in India today it is easy to find successful micro-enterprises in the vicinity run by women, who not only manage their household but also financially support their families and educate their children. While these are often home-based businesses they do have the potential to scale but the entrepreneurs are unable to do so. The authors note that there has been no dearth of schemes, initiatives and programs implemented by the government and the private sector, to increase access to finance for women entrepreneurs, but most of these programs exclude majority of women-led enterprises.

Delving into the challenges, the authors go on to talk about how there is a high risk perception of women entrepreneurs and how there are several ways to address this perception and encourage women led enterprises to scale and grow.

Speaking about the finance sector, the authors cite a recent International Finance Corporation (IFC) report which pointed out that women employees constitute less than 20 percent of the workforce in banks. These numbers are even fewer for women fund managers in private equity firms. Thus the problem becomes cyclical where with low representation of women in financial sector, unconscious gender biases of our patriarchal society often influence the investment decisions, leading to high rejection rates for women-led businesses.

Speaking about catalyzing women investing in women, the authors urge the need to move beyond loans and borrowings, and to look at global trends and how this very aspect to go beyond conventional schemes and initiatives has encouraged the rise of “Women Investing in Women”, where venture funds set up by women are investing in women entrepreneurs. Today almost 70 percent of such gender lens investing funds in developed countries were either seeded by women investors and/or raised from women as limited partners. The authors name several such funds across that are not only investing in women entrepreneurs but are also running targeted interventions to build capacity of women as angel investors.

In conclusion, the authors bring the conversation back to India, and ask some pertinent questions around creating a conducive atmosphere and a positive narrative that creates real change on the ground and brings about a paradigm change in the way of our thinking to build an empowering and an inclusive society.